Will preparation focuses on property ownership and its distribution after the death of the owner. The owner of property has the right to control the disposition of property during life; that right extends to directing the disposition of property after death. The property a person owns at the time of death is known as the decedent's estate. Most adults own some property, even those who think they have no need for a will. This is because the kinds of property subject to disposition on death include items most people overlook when cataloging their assets.
When we think of the kinds of property subject to disposition on death, we ordinarily think of real estate interests, tangible personal property (cars, jewelry, furniture, etc.), and cash and cash equivalents (bank accounts, certificates of deposit, money market accounts, and treasury notes). To be sure, after death, transfers commonly include items like these. They are not, however, the only items of property that are distributed on death.
The decedent may control a variety of less well-known property interests. The right to control the payment of life insurance proceeds is a property interest. An investor may hold interests in marketable and nonmarketable securities. The owner of a business should consider the disposition of items such as partnership interests, accounts and notes receivable, and liabilities. An employee receiving certain fringe benefits can determine the disposition of an interest in an employer-funded qualified benefit plan (including the designation of a beneficiary), in a nonqualified deferred compensation plan maintained by the employer, or in death benefit plans maintained by the employer.
Reasons for Preparing a Will
A will is the most flexible of the methods of distribution of property after death. All wills are written, contain a declaration of intent concerning the disposition of property, and provide that the declaration is effective only on death. Wills are written so we will know the intent of the testator (the person giving the directions in the will) after death. Wills make it unnecessary to rely on the memory of someone who might have an interest in the disposition of the property. Because a will is an expression of the testator's intent, a will is ambulatory. That is, a will is an expression of intent that can change. The testator's intent is final only on death.
Wills have several advantages over other methods of transferring ownership interests after death.
Wills are flexible and allow the unequal distribution of assets.
A will allows the testator to clearly express intentions about the disposition of assets.
A will allows the testator to separately consider the needs of beneficiaries, including special circumstances such as deferring payments to minors or the creation of special purpose trusts.
A will allows the testator to address some sort of situation the legislature did not consider, such as disposition of a unique asset or the requirements of a unique personal situation.
A will allows the testator to control the choice of persons who will administer the estate, who will distribute the assets for an incapacitated beneficiary, or who will be responsible for the moral and ethical education of the testator's children.
Not everyone who owns property can prepare a will. Every state has statutes that regulate the preparation of wills. In general, these statutes require that the testator have legal capacity and testamentary capacity, that the will be in writing, and that the will be signed and witnessed. Additionally, these statutes specify how the courts interpret a testator's ambiguous expressions of intent.
Letters of Instruction
Letters of instruction are not part of a will. They are usually a separate document detailing the testator's wishes about any number of items; they can address funeral arrangements, organ donation, and other matters. In this sense, letters of instruction are useful and valuable. Every testator should prepare letters of instruction and discuss them with loved ones, spiritual advisors, and others.
Letters of instruction should not be used to express instructions about the disposition of property that are inconsistent with the provisions of the will. It is improper, for example, to prepare a will calling for equal distribution of property and attach letters of instruction naming alternate beneficiaries and specifying a different distribution plan. Where letters of instruction are in conflict with the express provisions of a properly drafted will, the probate court may ignore them.
Every testator should understand, however, that there is no way to enforce these letters of instruction after death. Testators who use letters of instruction to dispose of property create problems for the legal professional. As a paralegal, you may be asked to spend time with a client who insists on discussing the letters of instruction. Even though letters of instruction are not enforceable, you should refrain from giving legal advice. Suppose the client wants to leave instructions for the disposition of a family heirloom in the letters of instruction — directing a family member to hold a specific ring until a granddaughter reaches age eighteen. Although the client knows that this wish is unenforceable in this form, a paralegal should not give legal advice about the effect of this instruction. Be aware of the limits of the letters of instruction and make the supervising attorney aware of the client's intent.